A FERC administrative law judge (ALJ) has agreedTranscontinental Gas Pipe Line was well within its rights when itdenied ANR Pipeline an additional interconnection to its mainlinesystem in Louisiana, saying that Transco’s action did notdiscriminate, violate antitrust principles or cause ANR to losebusiness.

In his initial decision, Presiding ALJ David I. Harfeld foundthat Transco had refused similar requests by other pipelines in thepast based on a “pre-existing” policy, which barred constructionfor any party of a second interconnect on a Transco supply lateralthat would feed the same pooling point as an existing interconnect.ANR is seeking an additional 300 MMcf/d interconnect at EvangelineParish, LA, so that shippers can avoid Transco’s IT feeder chargeat its existing interconnect with Transco near Eunice, LA[CP98-74-001].

Harfeld’s ruling was in contrast to the Commission’s decisionlast July ordering Transco to build the interconnect for ANR. FERClater stayed the order and directed the ALJ to hold hearings on twospecific issues in the case. Interestingly, the Commission didn’task Harfeld to address whether ANR ought to be granted theinterconnect, but the ALJ said he felt “behoove[d]” to do soanyway.

The case has captured the interest of some in the gas industrybecause it puts squarely before the Commission the issue of itsinterconnection policy under the Natural Gas Act (NGA), whichrequires pipelines to provide mandatory interconnects to LDCs only.The ANR-Transco case, some observers say, poses the question ofwhether the policy should be expanded.

“The reason why this one’s particularly critical is because thewhole issue of pipeline interconnects ultimately will determine howcompetitive this industry’s going to get,” commented a producersource. The issue of whether FERC has the authority to orderinterconnects for parties other than LDCs was not before Harfeld,but Transco has raised it on rehearing.

When the case comes up again, FERC may decide it has “nolatitude” to make any changes to its interconnect policy under theNGA. “But if they decide to go the other way, it will be veryinteresting,” the producer source said. It conceivably could set aprecedent that would “stretch the boundaries” of the NGA.

Susan Parker

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